Walmart MoneyCards will be solely issued by Green Dot later this year when an agreement filed this week becomes final.
Currently, the reloadable prepaid cards are jointly owned by GE Capital Retail Bank and Green Dot Bank. Their third-party agreement with Walmart was set to expire in May 2015, but with this modification all of GE’s rights and obligations will transfer to Green Dot Bank.
Green Dot will acquire all assets and liabilities of the program when the transaction is finalized during the second half of 2013. GE’s core business model is focused on consumer credit, not prepaid cards. Like traditional bank accounts, all Green Dot prepaid accounts are FDIC insured to protect cardholders.
Prepaid cards continue to boom in popularity
The Walmart MoneyCard was introduced in 2007. Since then, prepaid cards have become more popular with people as an alternative to credit or debit cards, and even traditional bank accounts. Prepaid cards can be used to make purchases, transfer funds, and make transactions online.
Underbanked consumers—those who do not have checking accounts—often have no easy way to do these things, making prepaid cards a viable alternative for those who cannot open checking accounts for one reason or another.
Another reason people are flocking to the prepaid card market is to avoid the fees charged by banks, for everything from paper checks to ATM withdrawals. Prepaid cards come with their own fee schedules, but the cost is comparable, and prepaid cards may come out on top for some folks.
No change on horizon for consumers
Walmart MoneyCard users should not expect any changes to their account. Consumers will be able to use their prepaid accounts as usual, and Green Dot will continue to provide card reloading and other services to cardholders.
Walmart MoneyCards charge an activation fee, monthly fee, a reload fee and an ATM fee. Loading the card through direct deposit is free.